Market Update: U.S. Stocks Rocket to New Highs on Mexico Trade Deal; Bitcoin Finds Stability

U.S. stocks surged to new highs on Monday after President Trump announced a new bilateral trade agreement with Mexico, putting the pressure back on Canada to return to the negotiating table. In cryptocurrencies, bitcoin continued to trade in a narrow price band as volatility approached its lowest levels of the year.

Stocks Surge

All of Wall Street’s major indexes put up firm results on Monday, with the S&P 500 and Nasdaq notching their second straight record high.

The large-cap S&P 500 Index rose 0.9% to close at 2,896.74, with eight of 11 primary sectors contributing to the gains. The technology-heavy Nasdaq Composite Index rose 0.9% to 8.017.90. Dow industrials climbed 359.39 points, or 0.9%, to 26,049.64.

The CBOE Volatility Index, also known as the VIX, held near multi-week lows after an uneventful session. Wall Street’s fear index edged up 1.8% to 12.23.

Wall Street is charting a divergent path with its international peers as emerging-market risks and a slowdown in global growth continue to weigh down European and Asian markets. Turkey’s currency crisis and the threat of contagion has also put a damper on risk sentiment.

U.S.-Mexico Trade Agreement

The United States and Mexico have agreed to a bilateral trade agreement that effectively re-writes the long-standing NAFTA accord, putting the pressure squarely on Canada to rejoin its regional partners at the negotiating table.

The new deal overhauls guidelines for building automobiles across the continent to ensure that a greater percentage of manufacturing is carried out in the United States. Bringing long lost factory work back to U.S. soil was a lynchpin of Trump’s economic policy in the run-up to the 2016 presidential elections.

Canada remains at odds with the United States on several issues, including the removal of dispute resolution measures and the controversial “sunset clause” that President Trump is demanding be included in any potential agreement.

Bitcoin Price Continues to Stabilize

Bitcoin’s price stabilized on Monday, with the technical indicators continuing to show a strong possibility for an imminent breakout. The leading digital currency traded as high as $6,785 on Bitfinex for a total market capitalization of $116 billion. Bitcoin’s trading range narrowed to just $133 as volatility continued to decline.

As Hacked reported earlier, bearish bets on CBOE bitcoin futures fell las week to the lowest level since December. Non-commercial contracts of bitcoin futures totaled -1,266 for the week ended Aug. 21, according to the latest Commitments of Traders report issued by the U.S. Commodity Futures Trading Commission (CFTC).

The combined value of all cryptocurrencies rose 2% to $219.1 billion, according to the latest CoinMarketCap data. With the exception of Tether’s USDT, all major assets in the top-ten traded higher.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi